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Bay Area home prices continue double-digit gains on historic streak

Louis Hansen, The Mercury News on

Published in Home and Consumer News

SAN JOSE, Calif. -- Tight housing supply pushed Bay Area home prices higher yet again in December, extending year-over-year, double-digit gains for the fifth straight month -- and overall gains to an historic 69 straight months.

The median sales price for a single-family home in the nine-county region rose to $765,000 in December, up 13.8 percent from last year, according to real estate firm CoreLogic.

The latest data continues a Bay Area housing narrative now stretching toward six years -- a rollicking market great for property owners but punishing to newcomers and middle-income families hoping to buy.

"We still have an inventory-starved market where demand is outpacing supply," said Andrew LePage, analyst with CoreLogic. "It's bad news for first-time buyers and others looking for a foothold."

LePage said the robust market is similar to the streak of rising Bay Area home prices between December 2001 and November 2007. The region also saw steady, year-to-year growth in housing prices through the late 90s.

Single-family home sale prices in Santa Clara County raced up 35 percent during the last year, reaching $1.17 million in December. San Mateo County closed the year with a 17.6 percent gain in sales prices to $1.36 million. Bargain hunters in Alameda County drove up prices 16.8 percent to $800,000.

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Four of the nine counties ended the year with median sale prices topping $1 million. Buyers on a tight budget saw home costs escalate year over year in the counties of Contra Costa, up 8.9 percent to $542,000; Sonoma, up 15 percent to $632,000; and Solano, up 6.4 percent to $400,000.

The escalating prices also meant fewer home sales, with many residents unable or unwilling to wade into one of the most expensive markets in the country. The limited supply of single-family houses drove down December sales year over year, from 4,777 to 4,721 homes, a dip of 1.2 percent, according to CoreLogic.

The inventory of entry-level homes has been low, LePage said, and many buyers are focused on that segment.

Seasonal slowdowns and more sales of lower-cost, starter homes drove December's median price down from a record $825,000 in November.

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